Consider a Market That Is in Equilibrium

question 124

Multiple Choice

Consider a market that is in equilibrium.If it experiences an increase in demand,what will happen?

• A)The demand curve will shift to the right,and the equilibrium price and quantity will rise.
• B)The demand curve will shift to the right,and the equilibrium price will increase and the equilibrium quantity will decrease.
• C)The demand curve will shift to the right,and the equilibrium price and quantity will fall.
• D)The demand curve will shift to the left,and the equilibrium price and quantity will fall.

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Definitions:

Widgets

A generic term for any hypothetical or unspecified product or manufactured good used in discussions of business and economics.

Price Ceiling

A government-imposed limit on how high a price can be charged for a product or service.

Producer Surplus

The variation between the price that sellers expect to receive for a product or service and the actual price they end up getting.

Consumer Surplus

The difference between the maximum amount that consumers are willing to pay for a good or service and the amount they actually pay.